“In the end, although a business person is entitled to create corporate structures and relationships for valid business, tax and other reasons, the law must be vigilant to ensure that permissible corporate arrangements do not work an injustice in the realm of family law. In appropriate cases, piercing the corporate veil of one spouse’s business enterprises may be an essential mechanism for ensuring that the other spouse and children of the marriage receive the financial support to which, by law, they are entitled. The trial judge was correct to recognize that this was such a case.”
October 2, 2020 – Setting Aside Order Dismissing Appeal
“The overriding consideration on a motion to set aside an order dismissing an appeal is the justice of the case, which entails a consideration of the merits of the appeal: Akagi v. Synergy Group (2000) Inc., 2014 ONCA 731, at para. 8. In addition, factors analogous to those typically considered on a motion to extend the time to appeal inform a request to set aside the administrative dismissal of an appeal: (i) the explanation for not perfecting the appeal within the time stipulated by the rules; (ii) the length of and explanation for the delay in moving to set aside the administrative dismissal; and (iii) prejudice to the respondent.
More justification must be shown by a party moving to aside an administrative dismissal of an appeal than would have been required had the party earlier availed itself of its rights to move for an extension of time to perfect the appeal: Langer v. Yorkton Securities Inc. (1986), 1986 CanLII 2612 (ON CA), 57 O.R. (2d) 555 (C.A.), at para. 14.”
October 1, 2020 – Imputation of Income When Support Payor is Incarcerated
“I am aware of two decisions where imputation was considered for child support purposes while the payor was incarcerated. In both, the existing orders were in essence continued based on previous earnings: Khentov v. Bieler, [2007] O.J. No. 1159 (Ont. S.C.J.) at paragraph 23, and Billingsley v. Billingsley, 2010 ONSC 3381 (Ont. S.C.J.) at paragraph 52. The rationale, as in the above paragraph, was that intentional criminal actions led to the incarceration and resulting unemployment. Incarceration was not considered to be a sufficient reason for the parent being unable to work.
The applicant suggests those latter cases lead to a seemingly hard and fast rule that where a support payor is incarcerated child support is to be imputed based on prior earnings. However, I note that imputation is discretionary under the Guidelines (Drygala at paragraph 44), and the ultimate consideration (per the third part of the test in Drygala ) is always reasonableness. A situation where a person’s drug and/or criminal behaviour has led to decreased earning capacity may be somewhat different than a situation where a payor is incarcerated and is therefore simply unable to earn any income. In the former, the payor would still have the capacity to do something to address his or her issues, and have the potential to correct the failure to satisfy the support obligation.
While all the 19(1) listed criteria are clearly designed to direct the court in the exercise of its discretion in determining reasonable income, given the way it is applied subsection 19(1)(a) has the added practical role of encouraging or in effect coercing parents to earn to their capacity to support their children. However, an incarcerated parent cannot modify his or her behaviour by finding suitable employment in response to an imputation order. The order proposed by the applicant here would simply create debt. As argued, there is also an underlying element of punishment or penalty for the alleged criminal behaviour.
I am not convinced that there is an absolute rule that the court must always impute income where the payor was working prior to incarceration. The two cases referred to above were fact specific and considered many other contextual elements. In both the payor had already been convicted of the crimes. Most importantly for this motion, those decisions were final orders. This is only a request for interim support. In my view it is preferable to have the trial judge, on better evidence and with more up-to-date information, assess what would be reasonable support going back to the date of the incarceration in the respondent’s particular circumstances. No order that I make will assist to get regular support flowing now. If the respondent is ultimately acquitted, there might be an issue about the intentionality of his unemployment. If the respondent is released relatively quickly, full imputation might indeed be found to be appropriate. However, while the court must be mindful of the children’s need for financial support, if the respondent will be incarcerated for a long period, for example say 5 years, the circumstances of all those involved will need to be practically and thoughtfully considered before he is saddled by way of imputation with a very large (in this example $76,000) debt upon his release, a debt that would be very difficult if not impossible to vary given that his circumstances while incarcerated are unlikely to change. As noted in Jesse v. Jesse, 2010 ONSC 861 (Ont. S.C.J.) at paragraph 64, a cautious approach to income is appropriate on temporary motions for child support. I also note that the respondent raises his mental health and its connection to his circumstances. Imputation may not be appropriate if a parent is unable to work for mental health reasons: see Fraser v. Fraser, 2013 ONCA 715 (Ont. C.A.) .”
September 30, 2020 – Child’s Wishes and Order for Therapy
“Under the Children’s Law Reform Act and the Divorce Act, the child’s views and preferences are only one factor among many in determining the child’s best interests. Consequently, a child’s refusal to attend counselling is not necessarily determinative of their best interests.
Having said that, A.C. v. Manitoba (Director of Child and Family Services), 2009 SCC 30 (CanLII), [2009] 2 S.C.R. 181 at paras. 81 and 82 highlighted the potential tension between a child’s growing autonomy and the child’s “best interests” norm:
[81] The general purpose of the “best interests” standard is to provide courts with a focus and perspective through which to act on behalf of those who are vulnerable. In contrast, competent adults are assumed to be “the best arbiter[s] of [their] own moral destiny”, and so are entitled to independently assess and determine their own best interests, regardless of whether others would agree when evaluating the choice from an objective standpoint.
[82] The application of an objective “best interests” standard to infants and very young children is uncontroversial. Mature adolescents, on the other hand, have strong claims to autonomy, but these claims exist in tension with a protective duty on the part of the state that is also justified [citations omitted].
As a result, the majority in A.C. stated that the best interests standard “must be interpreted in a way that reflects and addresses an adolescent’s evolving capacities for autonomous decision-making”: at para. 88.
Under this interpretation of the best interests standard, a minor’s wishes will have greater weight as their maturity increases. In some cases, the court “will inevitably be so convinced of a child’s maturity that the principles of welfare and autonomy will collapse altogether and the child’s wishes will become the controlling factor”: A.C., at para. 87. Scrutiny of a child’s maturity will intensify in relation to the severity of potential consequences of medical treatment or its refusal: A.C. at paras. 95. This is partly because it is inherently difficult to assess an adolescent’s ability to make medical decisions: A.C., at paras. 70-79.
The majority in A.C. listed questions to assist courts in assessing maturity:
What is the nature, purpose and utility of the recommended medical treatment? What are the risks and benefits?
Does the adolescent demonstrate the intellectual capacity and sophistication to understand the information relevant to making the decision and to appreciate the potential consequences?
Is there reason to believe that the adolescent’s views are stable and a true reflection of his or her core values and beliefs?
What is the potential impact of the adolescent’s lifestyle, family relationships and broader social affiliations on his or her ability to exercise independent judgment?
Are there any existing emotional or psychiatric vulnerabilities?
Does the adolescent’s illness or condition have an impact on his or her decision-making ability?
Is there any relevant information from adults who know the adolescent, like teachers or doctors?: at para. 96
While A.C. was decided in relation to Manitoba’s child welfare legislation and its application of the best interests test, the above principles are still relevant for interpreting the best interests standard under the federal Divorce Act and Ontario’s Children Law Reform Act.
Taking this together, the HCCA [Health Care Consent Act] does not limit the courts’ jurisdiction to make therapeutic orders in the child’s best interests. A court must always consider a child’s view and preferences, but a child’s refusal to participate in a therapeutic intervention will not necessarily determine whether a court can make such an order. Rather, a court must assess the child’s maturity and weigh their wishes accordingly, in relation to the various factors listed in section 24(2) of the Children’s Law Reform Act.
There are of course risks in making therapeutic orders. The child may refuse to comply. A health care practitioner may consider that the child is capable and that he or she cannot override the child’s refusal. The attempts at therapeutic intervention may fail. Courts cannot fix every problem.
That said, time and time again, experienced family court judges have emphasized the value of access to a broad variety of remedial measures. Again, in Leelaratna, the trial judge observed, “there are often no legal solutions to family problems. Therapeutic orders can be very effective tools to help the family move forward, reduce the parental conflict, and help children transition though the emotional turmoil of their parents’ litigation in a healthier way”: at para. 52, see also Fiorito, where a reversal of custody and therapy was ordered to remedy a father’s estrangement from his children. Judges deciding custody cases should be enabled to create or support the conditions which are most conducive to the flourishing of the child.”
September 29, 2020 – Supervised Access
“The court has the power to order that the access of a parent be supervised. See s. 16(6) Divorce Act. The onus is on a person seeking to limit access to prove that the requested access restrictions are in the best interests of a child. See Lee v. Albrecht, supra; Hagen v. Muir, [2000] B.C.J. No. 786 (S.C.). Supervised access is not a permanent solution to access problems. Supervised access should only be used to alleviate a short-term problem and not to provide a long-term visitation arrangement. See M.(B.P.) v. M.(B.L.D.E.) (1992), 1992 CanLII 8642 (ON CA), 97 D.L.R. (4th) 437 (Ont. C.A.).”
Shaikh v. Martin, 2017 ONSC 5842 (CanLII) at 93
September 25, 2020 – Summary Judgment Denied: An Interim Order
“This court has repeatedly held that an order of a Superior Court judge refusing to grant summary judgment and directing that the matter proceed to trial is an interlocutory and not a final order: see V.K. Mason Construction Ltd. v. Canadian General Insurance Group Limited (1998), 1998 CanLII 14615 (ON CA), 42 O.R. (3d) 618; Ashak v. Her Majesty the Queen in Right of Ontario (2013), 2013 ONCA 375 (CanLII), 115 O.R. (3d) 401, at para. 7.
Highland Shores Children’s Aid Society v. C.S.D., 2017 ONCA 743 (CanLII) at 5.
September 24, 2020 – The Power to Strike
“Rule 1(8) of the Family Law Rules provides that a court may strike a party’s pleadings as a consequence of failing to obey an order if the court considers it necessary for a just determination of the matter.
Rule 2 of the Family Law Rules sets out that the primary objective of the court is to decide cases justly. This includes the court enforcing its orders and ensuring that parties receive adequate disclosure according to the complexity of the case and the issues relevant to the ultimate disposition of the matter.
The power to strike out a party’s pleadings should be used sparingly and only in exceptional cases: Roberts v. Roberts, 2015 ONCA 450. In family law cases, pleadings should only be struck, and trial participation denied, in exceptional circumstances and where no other remedy would suffice: Purcaru v. Purcaru, 2010 ONCA 92.
In family law proceedings, wilful non-compliance of basic financial information must be considered egregious and exceptional, Manchanda v. Thethi, 2016 ONCA 909. A party’s non-compliance must be considered in the context of the strict financial disclosure obligations repeatedly reiterated by the courts: see for example, Roberts v. Roberts, 2015 ONCA 450 at para. 11 and the Family Law Rules: see Rule 13. Those who choose not to disclose financial information or to ignore court orders will be at risk of losing their standing in the proceedings as their claims or answers to claims may be struck: Manchanda v. Thethi, 2016 ONCA 909.
The Court of Appeal provides a decision-making framework for the application of FLR 1(8) in Mullin v. Sherlock, 2018 ONCA 1063 (CanLII), [2018] O.J. No. 6743:
44 First, when faced with an allegation of failure to obey a disclosure order, before granting a remedy, the judge must be satisfied that there has been non-compliance with the court order.
45 Second, once satisfied, a judge may have recourse to the alternatives described in Rule 1(8). In assessing the most appropriate remedy, a judge should consider the following factors:
*the relevance of the non-disclosure, including its significance in hindering the resolution of issues in dispute;
*the context and complexity of the issues in dispute, understanding that an uncomplicated case should have little tolerance for non-disclosure, whereas a case involving extensive valuation of assets may permit some reasonable delay in responsiveness;
*the extensiveness of existing disclosure;
*the seriousness of efforts made to disclose, and the explanations offered by a defaulting party for the inadequate or non-disclosure; and
*any other relevant factors.
46 Having considered these factors, the judge will then determine the best remedy. The orders identified in Rule 1(8) are not exclusive. Other approaches may be appropriate. For example, one option might be to invite the moving party to seek at trial an adverse inference from the failure to disclose and for the motion judge to memorialize this invitation in reasons for decision. Parties frequently rely on another option, namely a request for an adjournment to allow for more time to effect disclosure. Occasionally this may be appropriate especially in a complex case, but an adjournment should not be automatic. Fully compliant disclosure is the expectation, not the exception.”
September 23, 2020 – Post-Separation Increases In Income
“Spouses are not automatically entitled to share in post separation increases in income. To do so, one must establish a compensatory basis for the claim. Otherwise, spousal support is to be generally calculated on the basis of parties’ incomes as of date of separation: Hersey v. Hersey, 2016 ONCA 494 (CanLII). This trial is unusual – a post separation increase in income is being considered within an original application – but the principles remain the same.
Justice McDermid in Patton-Casse v. Casse, 2011 ONSC 4424 (CanLII) sets out at para. 136, the criteria to be considered on a claim to include a payor’s post-separation income increase in a determination of spousal support:
(a) Were the payor’s skills and credentials from which he earns the increased income obtained during marriage?
(b) Does the income of the payor flow from a job that is different from that which he had during marriage? Is the reason for the increase a career continuation or a new venture?
(c) Was this a long-term marriage with a “complete integration of the parties’ personal and economic lives”?
(d) What is the time elapsed between the date of separation and the date of the income increase?
(e) Is the support being awarded compensatory or non-compensatory?
These criteria were significantly expanded by Justice Chappel in Thompson v. Thompson, 2013 ONSC 5500 (CanLII) in which she repeated and expanded upon the general principle that a spouse is not automatically entitled to share in post-separation income increases. Relevant to these circumstances, she included in her analysis a consideration of whether the increase can be linked to contributions made by the recipient spouse; whether the parties’ personal and financial affairs became completely integrated during the course of the marriage, and the extent of the recipient’s sacrifices and contributions to the family.”
September 22, 2020: Openness of our Courts
““Democracy Dies in Darkness” is the masthead motto of the American newspaper, The Washington Post. Our Supreme Court has expressed identical tenets in the context of the openness of our courts.
In any constitutional climate, the administration of justice thrives on exposure to light – and withers under a cloud of secrecy.
Toronto Star Newspapers Ltd. v. Ontario, 2005 SCC 41, [2005] 2 S.C.R. 188, at para. 1.
Openness is necessary to maintain the independence and impartiality of courts. It is integral to public confidence in the justice system and the public’s understanding of the administration of justice.
Re Vancouver Sun, 2004 SCC 43, [2004] 2 S.C.R. 332, at para. 25
The concept of open courts is deeply embedded in the common law tradition. The principle was described in the early English case of Scott v. Scott, [1913] A.C. 419 (H.L.). A passage from the reasons given by Lord Shaw of Dunfermline is worthy of reproduction for its precise articulation of what underlies the principle. He stated at p. 477:
… “… Where there is no publicity there is no justice.” “Publicity is the very soul of justice….”
Canadian Broadcasting Corp. v. New Brunswick (Attorney General), 1996 CanLII 184 (SCC), [1996] 3 S.C.R. 480, at para. 21.
This is not to suggest that the openness principle is absolute. It is not. But the principle is now well-established – court proceedings are presumptively “open” in Canada subject only to when it is shown that “disclosure would subvert the ends of justice or unduly impair its proper administration.” Toronto Star, at para. 4. [Emphasis in original.]
September 21, 2020 – Fraudulent Conveyances and the Family Law Act
“The Court of Appeal for Ontario has held that the Fraudulent Conveyances Act and the Family Law Act may work together to invalidate fraudulent transactions, even where the claimant spouse is not a judgment creditor. In Purcaru, the Court upheld the invalidating of a transaction between the respondent husband and other parties as fraudulent, and the naming of those parties and affiliated companies in the action. The Court of Appeal affirmed this right in Mikhail v. Cole (2017), 2017 ONCA 262 at 5.
The Court of Appeal has also permitted a claimant spouse to use the FCA and FLA together to invalidate transactions entered into for the purpose of shielding assets from equalization: Stone v. Stone, 2001 CanLII 24110 (ON CA), [2001] 55 O.R. (3d) 491 (C.A.) at paras. 36-39. In Stone v. Stone, (2001), Feldman J.A. noted the Supreme Court of Canada held that in determining matrimonial property rights, courts should not view the Family Law Act as a restrictive code: at para. 43, citing Rawluk v. Rawluk, 1990 CanLII 152 (SCC), [1990] 1 S.C.R. 70.
Feldman J.A. further considered whether spouses were included in the definition of “creditors or others” within s. 2 of the Fraudulent Conveyances Act. She held that:
… in order for a spouse to qualify as a person who is intended to be protected from conveyances of property made with intent to defeat her interest, she must have had an existing claim against her husband at the time of the impugned conveyances, that is a right which she could have asserted in an action: Stone, at 26.
Thus, the spouse must have an existing claim, but need not be a “judgment creditor” to access the benefit of the Fraudulent Conveyances Act to invalidate a transfer: Stone, at 41. Feldman J.A.’s analysis indicates that courts must be able to set aside transfers under the Fraudulent Conveyances Act in order to properly calculate equalization payments: Stone, at 40. To allow otherwise would result in an inaccurate equalization payment. She concludes:
[W]here on the facts, the Fraudulent Conveyances Act can apply, there is nothing in the Family Law Act which ousts the operation of the Fraudulent Conveyances Act as part of the process to determine the net family property of each spouse as of the applicable valuation date: Stone, at 44.”
Fatahi-Ghandehari v. Wilson, 2018 ONSC 5587 (CanLII) at 102-105